For Epcon Communities, what happens if a party signs the Personal Covenants and Agreement document?

1. As an inducement to Epcon Communities Franchising, LLC to enter into the Franchise Agreement with Franchisee, and/or to consent to the Sublicense Agreement, and in consideration of the direct personal benefit to be derived by the undersigned thereby, the undersigned agrees that he or she shall be personally bound by all of the recitations, obligations and covenants of Franchisee contained in Article 5 ("Franchisee's Obligations"), Article 10 ("Confidentiality; Non-Disclosure; Proprietary Information"), Article 11 ("Completion of Project(s)"), Article 13 ("Default; Termination") and Article 16 ("Indemnification and Insurance") of the Franchise Agreement as if such recitations, obligations and covenants were made and given personally by the undersigned directly to Epcon Communities Franchising, LLC as a party to the Franchise Agreement, including without limitation the following:

The undersigned agrees not to communicate or otherwise divulge to, or use for the benefit of any third Party, any information or knowledge concerning the Epcon Communities Development System (as defined in the Franchise Agreement).

The undersigned acknowledges that the Development System is the exclusive property of Epcon Communities Franchising, LLC, and the undersigned agrees that he or she shall not use the Development System or any of its parts or any system, plans, materials, or designs resembling in any way the Development System except in strict accordance with the terms of the Franchise Agreement and the Sublicense Agreement.

• 1. This Personal Covenants and Agreement document shall become effective when accepted and executed by Epcon Communities Franchising, LLC in the State of Ohio and shall be governed by the local laws of such State, without applications of its conflicts of law principles.
• 1. Under no circumstances will Epcon Communities Franchising, LLC be liable to the undersigned for any amount claimed against Epcon Communities Franchising, LLC which exceeds an amount equal to (i) the amount of the Project Fee (as defined in the Franchise Agreement) for the Initial Franchise Fee (as defined in the Franchise Agreement) actually paid to Epcon Communities Franchising, LLC by Franchisee under the Franchise Agreement, multiplied by (ii) the undersigned's percentage ownership of Franchisee as of the time of determination of any liability. ALL CLAIMS AGAINST EPCON COMMUNITIES FRANCHISING, LLC AND/OR ITS AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, AND EMPLOYEES FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES, WHETHER BASED UPON THEORIES OF CONTRACT, TORT, OR OTHERWISE, ARE HEREBY WAIVED BY THE UNDERSIGNED.

• c.

If the undersigned has a limited investment or other ownership interest in the Project (as defined in the Franchise Agreement), the undersigned agrees that he or she has read and shall be personally bound by all of the recitations, obligations, and covenants of Franchisee contained in Sections 5.2, 5.6, and 5.7 of Article 5 of the Franchise Agreement, entitled "Franchisee's Obligations", Article 10 of the Franchise Agreement, entitled "Confidentiality; Non-Disclosure; Proprietary Information", and Section 11.2.2 of the Franchise Agreement, entitled "Completion of Project(s)".

• d.

The undersigned agrees that, in the event he or she breaches any obligation or covenant set forth or referenced herein, Epcon Communities Franchising, LLC and/or Franchisee and/or Sublicensee shall be entitled, without bond, to the entry of temporary and permanent injunctions and orders of specific performance as necessary to prohibit any violation of the terms of this Personal Covenants and Agreement document or any applicable law, ordinance, or regulation, or which is dishonest or misleading to Epcon Communities Franchising, LLC or the general public.

The undersigned agrees that such recitations, undertakings and covenants are fair and reasonable and will not deprive the undersigned of his or her respective livelihood.

• 5.5 Franchisee shall provide to Franchisor at the time of execution of this Agreement copies of Exhibit "3" attached to this Agreement (the "Personal Covenants Document") executed by each of the principals, officers, owners and directors of Franchisee or any sublicensee and any other individuals or entities with any ownership or control interest whatsoever (including any investors) in Franchisee or any sublicensee, and, during the term of this Agreement, if a change occurs in the principals, officers, owners, investor and/or directors of Franchisee or any sublicensee or in the other individuals or entities with an ownership or control interest in Franchisee or any sublicensee, Franchisee agrees that it will promptly deliver to Franchisor copies of the Personal Covenants Document executed by each of the new principals, officers, owners, or directors of Franchisee or other individuals or entities with an ownership or control interest (including any investors) in Franchisee or any sublicensee.

• 5.6 Additionally, Franchisee shall provide to Franchisor copies of the document included as Exhibit "3A" attached to this Agreement executed by each person who may be provided, either by Franchisee, Franchisor, or any sublicensee with more detailed information about the Development System than has been or will be disclosed to the general public, but whom is not otherwise subject to the requirements respecting the Personal Covenants Document set forth in Section 5.5 or to the provisions of the Personal Covenants Document.

The undersigned also understands, acknowledges, and agrees that neither the Franchise Agreement, the Sublicense Agreement, or this Personal Covenants and Agreement creates any implied license to use, copy, distribute, or create derivative works from any copyrighted work owned by Epcon Community Franchising, LLC, and that the only licenses to do so are those may be expressly set forth in those agreements.

Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 54–55)